Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 8 - Reporting and Analyzing Receivables - Self-Test Questions: 2

Answer

C : $686

Work Step by Step

Since $300 $$ worth of merchandise was returned, the remaining amount to be repaid was 700. The conditions of the trade was that 2/10, meaning a 2% discount if the money is repaid withing 10 days. They repaid the money withing 10 days, so they get a 2% discount on 700. That means the final amount to be repaid was (0.98 x 700) = 686.
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